Ernest Germain

Eastern Europe Since 1950

(July 1952)

1. Accelerated Industrialization

Beginning with 1949-50 the “peoples’ democracies” entered a stage of accelerated industrialization. [1] The annual, biennial and triennial plans for rebuilding the economy and repairing wartime destruction have now been succeeded by five and six year plans for industrial development. These plans tend to transform all of the eastern part of Europe from an agricultural into an industrial area. Barring foreign military intervention this transformation is already assured. It represents a revolution in the economic structure of the old continent, who.se long-range consequences, can hardly be grasped. Century-old centers of economic stagnation and of barbarism, in Slovakia, Hungary, Rumania, in the Carpathians and along the Vistula, are thus rapidly being erased from the map of the world. No political or social consideration can serve to diminish the enormously progressive significance of this fact. The accelerated and feverish pace of industrialization is clearly expressed in the indices of production. In Bulgaria, industrial production has tripled in comparison with the pre-war period. In Poland it has reached the index figure 268. In Hungary it has passed the index 200 and the plan anticipates that in 1954 production will be three times that of 1949. In Czechoslovakia production, has reached the index 180, as compared with the pre-war period, and in Rumania the index at 175 while production for 1955 is set at 250% higher than that of 1950.

During the course of last year a revision of plan targets took place in all these countries except Bulgaria. This revision was in the direction of speeding up the pace of industrialization. Thus for Czechoslovakia industrial production for 1953 will have to reach twice that of 1948, whereas the initial plan only provided for an increase of 57%. A law of May 17, 1951 set as the new objectives of the Hungarian five-year plan the attainment of an index of 310 in 1954 as compared with 1949 production, whereas the initial plan had set the index only at 186.4. In Rumania investments which had reached 145 billion leis in 1950 (some 4.5 times greater than in 1948) are to rise to an annual average of 330 billions starting with 1951. The goal of the Polish six-year plan had been set in 1948 as three times the pre-war industrial production. It is now intended to quadruple it.

This revision of plan objectives requires above all a radical change in the relationship of heavy and light industry in favor of the former. In Czechoslovakia notably, the output of heavy industry, which in 1951 made up 49% of the gross product of all industry, is set for 55% in 1952, which means a 2.5% greater output of heavy industry than in 1937 (and a production of light industry below that of the pre-war period). In Hungary production of heavy industry increased 32% in 1951 as compared with 1950, that of light industry increased only 20%. Its target for 1954 is 70% of all industrial production. In Poland the heavy industry sector is to advance from 59.1% in 1949 to 63,5% in 1955. Even Rumania, where heavy industry was almost completely non-existent, committed 40% of its total investments to this sector in 1950 and 45% in 1951.

The development of the steel industry takes the central place in the industrialization plans for Eastern Europe. The entire buffer zone, including eastern Germany, should produce 16 million tons of steel in 1954, that is to say, as much as the record production of Great Britain, more than German production on the eve of the second world war, and twice the pre-war production of Japan. Six new installations for steel-works, blast furnaces and rolling mills will be constructed toward this end: at Nowa Huta (a new city of 100,000 inhabitants, 10 kilometers from Cracow) and Czestochova in Poland, at Fuerstenwalde in eastern Germany, at Moravska-Ostrava and Kosice (Slovakia) in Czechoslovakia, and finally at Dunapentele in Hungary. Each of the centers will have a productive capacity of over a million tons of steel annually. Other smaller steel-works will be built or enlarged in Rumania, Poland, Czechoslovakia and Hungary.

The anticipated development of electrical production is startling in its proportions. The electrification of Rumania is set for an annual production of 4.7 billion kilowatts in 1955. For the year 1960, per capita production of 150 watts is anticipated as against 37.5 watts in 1951. In Czechoslovakia work is beginning on a dam equalling the capacity of Dnjepostroi. In Poland the great dams of Jaworzno, of Duchow and of Stettin are appearing, and a new dam is in preparation near Warsaw which will have twice the capacity of that of Genissiat.

A certain specialisation is provided for the different countries in the course of the industrialization plans. Czechoslovakia will primarily be the forge of the buffer zone, being called upon to produce 4.5 millions of tons of steel in 1955, and its production of heavy machinery (turbines, Diesel engines, transformers, turbo-generators, rolling-mill equipment, etc.) is supposed to provide the tools for all the countries of eastern Europe. Eastern Germany will specialize in optics, precision tools, naval construction, the production of cranes. Polish coal and coke will furnish the foundation for the heavy industry of the whole buffer zone; the Polish chemical industry, now second in importance in the country (its production will have reached 800% of the 1938 level by 1955!), will supply soda, fertilizer, cement, and synthetic products (rubber, dyes etc.) to the buffer zone. The export of Polish machine tools will be of vital importance for the industrialization of neighboring countries. Hungary will supply aluminum, railway cars and secondary machinery. Rumania, finally, will supply oil and will have to develop its agricultural machine industry for export.

The main bottle-neck industrialization encounters in the buffer zone is the shortage of coal. Whereas metallurgical and steel production must be more than doubled, coal production in all the countries of eastern Europe will experience an overall increase of only 40%. [2] Poland, the principal producer, will have to increase its production by 25% in order to attain 300 million tons annually by 1955; this is a modest objective, since the production of Silesian coal reached this figure under German management in 1943. The lack of mechanization and above all the decrease in productivity makes the realization of even these objectives doubtful. The successive campaigns of intimidation and of favoritism towards the miners, waged by the Stalinist Parties, have had little success up to now.

Overall, the successes already attained by industrialization can be summarized in the following comparisons: per capita industrial production in Czechoslovakia has already surpassed that of France; Polish and Hungarian per capita production have surpassed that of Italy; Poland by 20%. For 1955. it is forecast that Czech per capita production will reach the German pre-war level; that of Poland and Hungary will reach the French level; that of Rumania will reach the Italian level.

2. Disproportion Between Industry and Agriculture

“The cause of our present difficulties lies in the generally well-known disproportion between the tempo of socialist development in industry and the tempo of development in our agriculture, which operates preponderantly on an individual basis and often even according to capitalist methods.”

This is how Hilary Minc, director of Polish economy and the most capable economic specialist of the buffer zone, characterized the overall condition of Polish economy last October (Trybuna Ludu, Oct. 10, 1951). This characterization is completely correct. The uneven development in industry and agriculture (at the end of 1951 the Polish index of industrial production was 268, the index of agricultural production 95, the 1938 level being equivalent to 100) is not at all however, “inevitable in a socialist” economy (Minc means: an economy in the transitional period). To eliminate this disproportion, all that would be necessary would be, to pursue a long-term agricultural policy, to devote an important part of industrial production to the production of agricultural machinery and industrial consumer goods, thereby accelerating the voluntary acceptance by the peasants of cooperative production, which is more remunerative and more productive.

Failing to foresee this difficulty – typical of the great concern the Stalinists show for the alliance between the proletariat and the peasantry! – and as a consequence of the economic directives of the Soviet bureaucracy, the industrial rise in 1951 produced only enough agricultural machinery in 1951 to service one-sixth of the agricultural enterprises and one-tenth of the arable land. It is in this lag in the mechanization of agriculture that we must seek the real reason for the food crisis which is now raging, in varying degree, in most of the countries of the buffer zone.

Minc endeavors to explain this crisis by the fact that the social structure of the population has been profoundly altered. Prior to the war the number of non-agricultural wage-earners amounted to 2,733,000; in 1951 this number rose to 5,200,000. Because of the large increase in the urban population, which rose from 38.6% of the total population in 1938 to 54.25% in 1951, a smaller number of peasants must therefore feed an increased number of city-dwellers. But this line of argument does not take into account the fact that the pre-war population included an enormous village overpopulation, which Polish sources themselves estimate as a minimum of 5 to 7 million employable workers. (Wirtschaftsdienst published by the Polish Bureau of Information, August 1951). The same source estimates the present reserve working force in the Polish village as 2.5 million adult males. [3] Consequently, it is not a lack of agricultural labor, but the unremunerative system of small farms (831,000 Polish agricultural enterprises, even now cover an area of less than two hectares each which is at the bottom of the difficulty in supplying the city with food).

In addition, there is the weight of capitalist elements in agriculture (in Poland, 5.1% of the peasants possess 15.6% of the land) and in trade (30% of Polish retail trade is still in private hands) which gives agricultural development in the buffer zone a distinctly speculative trend. Minc explains that the enormous increase in the number of hogs since the end of the war – this number rose from 2.7 million in 1946 to 5.1 million in 1948 and 9.9 million at the end of 1950, thus surpassing the absolute number of the pre-war period and practically doubling their production per hectare of arable land – is the result of a government policy restricting the export of wheat, allowing the peasants to use this wheat for feed and purchasing hogs at a high price in order to export lard.

In the autumn of 1951 difficulties in supplying feed set in as a result of the drought and poor harvest. The rich peasants began to hoard grain (Polish kulaks produce 26% of all the wheat) and potatoes for feeding their hogs and to slaughter part of their sows, thus causing a simultaneous shortage in meat and in potatoes in the city and a fantastic rise in prices on the black market. In Hungary the same phenomena had occurred several months previously.

Rakosi states (Szabad Nep, December 2. 1951) that Hungarian industrial production passed the index 250 (pre-war average = 100) whereas agricultural production only reached 116. He explains, more frankly than Minc, that even without the bad harvest caused by drought, there would have been a crisis in food supply: hoarding of wheat and potatoes converted to fodder; speculation in meat; enormous price rise on the free market (Rakosi cites as an example the price of a 140 kilogram calf which rose from 900 forint in the spring of 1950 to five to six thousand forint in the spring of 1951). Whereas Minc advocates rationing as the best immediate solution of the problem, Rakosi explains that rationing introduced at the beginning of 1951 in Hungary had increased speculation, and for this reason it was again abolished in December. (Speech of Zapatocki in Rude Pravo of November 1, 1951.) The same pheonomena also occurred in a particularly harmful way in Czechoslovakia.

Pressure of Rich Peasantry

The pressure of the kulaks is manifested not only by hoarding but also by a considerable delay in the payment of taxes. Both Minc and Rakosi give numerous examples of this. Rakosi cites an example of a kulak who had debts of 2,700 forint to the state and in the meantime had purchased a house for 18,000 forint, a horse for 4,000 forint, a cow for 3,500 forint, and whose attitude was defended before the village “council” – a significant indication of the influence of the kulaks! – by the following argument: “When a man has so many expenses, he just can’t afford to pay his taxes.”

The example of the kulaks, Minc recognizes, has developed speculative tendencies in the middle peasants. There lies the most serious aspect of the situation, for the middle peasants dominate agriculture, and the state must be able to rely on their neutrality. Thus the Polish government has been compelled to resort to coercive measures: compulsory delivery of potatoes (decree of October 8, 1951); compulsory delivery of a certain number of cattle, hogs and poultry (law of February 1952). Rationing has been made more stringent in Poland, Czechoslovakia and Rumania. The quota of grain deliveries has been raised so high that not only the kulaks but even some middle peasants have been obliged to buy supplementary quantities of wheat on the free market in order to be able to fulfill their obligations. The monetary reforms (October 1950 in Poland, February 1952 in Rumania) had as their objective the distribution of the monetary reserves of the kulaks.

At the same time, Minc, Rakosi and Zapotocki insist on the fact that there is no question of changing fundamentally the agricultural policy of their governments; that they have no intention whatever of “liquidating” the kulaks but solely that of putting a brake upon their harmful activity. Thus Stalinist agricultural policy in the buffer zone bears the stamp of hesitation, empiricism and incoherence. [4]

The disproportion between industry and agriculture, buttressed in turn by the disproportion between the development of stock breeding and that of feed, production – (whereas in Poland the number of hogs practically doubled between 1948 and 1950, the production of rye increased only 3%, that of barley 7% and that of potatoes 39% – has provoked several phenomena of instability:

Agricultural prices are rising more rapidly than industrial prices: According to the Bulletin of the Polish Information Bureau (January 1952 issue) 10 kilograms of meat on the hoof before the war would buy an average of 23 kilograms of salt or 14 liters of gasoline; today it buys 100 kilograms of salt or 50 liters of gasoline. Before the war the peasant had to pay 210 liters of whole milk for a plow. 100 kilograms of nitrate fertilizer cost him the same amount. Today he can buy a plow for the equivalent of 70 liters of whole milk, and 100 kilograms of nitrate fertilizer only cost him 45 liters of whole milk, etc.

Peasant consumption is rising more rapidly than worker consumption: Per capita consumption of potatoes in the Polish village declined in 1950, as compared with 1938, but per capita consumption of wheat rose from 43 kilograms to 52 kilograms, and of meat from 13.7 kilograms to 17 kilograms (For a Lasting Peace, September 14, 1951). At the same time total agricultural production is lower, except for potatoes, than that of the pre-war period and the total population has decreased only 17%.

From this fact the rather considerable monetary increase in working-class family income arising from the introduction of piecework, the increase in overtime work, the generalization of woman labor, does not find its equivalent in food upon the market, loses its function as a stimulus and becomes a factor in inflation, in the increase in prices and in increasing net cost in industry. Minc stated on February 17, 1951 that nominal wages in Poland had increased 17% during the past year whereas labor productivity had risen only 9.1%. According to Szabad Nep of September 17, 1950, Hungarian industrial production increased 37.6% compared with the previous year, but overall wages rose 47.3%.

3. Development of Agricultural Cooperatives

Following the break of the Cominform with Yugoslavia, the Stalinist leaders in Eastern Europe were compelled by the Kremlin to proceed to the collectivization of agriculture.

This endeavor collided not only with inherent social difficulties – resistance by the peasantry – but with almost insurmountable technical obstacles as well: the inadequate number of agricultural machines. That is why agricultural cooperatives often consisted of the simple joining together of small farms without any resulting rise in labor productivity. With economic imperatives taking the upper hand upon the outbreak of the food crisis in 1950 and above all in 1951, collectivization was generally slowed down or even halted (notably in Hungary, by a decree dated February 28, 1951).

Nevertheless, a balance sheet of this first stage of collectivization indicates the important place which agricultural cooperatives and state farms will henceforth occupy in the agriculture of the buffer zone. In Bulgaria the number of producer cooperatives has reached 2,729, embracing 53.8% of all peasant families and 47.9% of the total area of land worked! In Czechoslovakia, the acreage of agricultural cooperatives is far in excess of one million hectares and has reached 17% of the arable land. In Poland, the number of cooperatives has increased from 243 at the beginning of 1950 to 2,200 at the beginning of 1951 and 3,054 toward the end of that year, covering 13.5% of the arable land. In Hungary, the number of families absorbed by cooperatives and state farms has risen to 236,500, grouped in 4,652 cooperative enterprises which together with the state farms cover 25% of the arable land. In Rumania, the tempo of collectivization is slower and at present has only reached a figure of 1,000 cooperatives, amounting to a small percent of the arable land (270,000 hectares).

The structure of these producer cooperatives varies greatly from country to country and within each country. Grouping them together, in the category “socialist sector of agriculture” is grossly inaccurate. Thus in Bulgaria, the land incorporated into the cooperative remains private property. After having paid the state in kind the price for use of machines and the purchase of seed arid fertilizer, 90% of the balance of the harvest is divided, 60% in. accordance with the hours of work contributed by each member of the cooperative, and 30% in accordance with the acreage of land brought in by each member.

The middle peasants in the cooperatives thus find in them a real source for appropriation of the work of others, a means of getting around the law banning the use of wage workers. [5] That is why a substantial number of these middle peasants have rejoined the cooperatives. The same phenomenon has also shown up in Poland, where the number of poor peasants rejoining the cooperatives has remained very small.

Condition of Farm Machinery

If the number of available agricultural machines is in itself greatly limited, the use of these machines is still further restricted by an extraordinary accident rate and by the lack of spare parts or poor functioning of repair stations. Rude Pravo (February 2, 1952) explains that in the past autumn 20 to 22% of available tractors were out of service in Czechoslovakia. Scanteia (February 6, 1952) explains that in Rumania there is great delay in the repair of tractors. From the last harvest up to January 20, numerous repair centers had not repaired a single tractor. Szabad Nep of February 5, 1952 states that on February 1, the agricultural machinery centers in Hungary had only carried out 46% of their plan for repairs, instead of the 71% forecast for this date. In Czechoslovakia, this percentage was only 40.6%. In Bulgaria, it is estimated that half the tractors are out of service at the present time.

The Stalinist leaders in eastern Europe have often emphasized the requirement that admission to agricultural cooperatives should be on a wholly voluntary basis. Nevertheless, the indirect economic pressure used does not solely and justifiably strike at the kulaks (by a policy of progressive increase in compulsory deliveries and taxes) but at the middle peasants as well and even the small ones. Deliveries of industrial, fertilizers and location of agricultural machines systematically favor the cooperatives as against the private enterprises. In Hungary, the private farm used an average of 6 kilograms of chemical fertilizer. per youg; in contrast the agricultural cooperative used 92.6 kilograms! (Statisztikai Szemle of Budapest, number 1-2, 1950). Since at the same time, according to the same source, natural fertilizer hardly sufficed to fertilize, 5.7% of arable land in the autumn of 1949, against the 20 to 25% forecast, a very strong pressure is thus exercised against the private enterprises.

Rakosi and above all Minc in Poland have asserted many times that tolerable economic conditions must continue not only for private enterprises in general, but even for kulak enterprises. But each time the Stalinist governments are confronted by increased pressure from the kulaks, they are inclined to seek a solution in a new extension of collectivization whose compulsory character is thinly veiled. The incoherence of this orientation further sharpens the generally incoherent character of agricultural policy in the buffer zone.

4. Foreign Policy and Equipment Difficulties

The application of industrialization plans has considerably changed the structure of foreign commerce in eastern Europe. Relations among all the “people’s democracies” have multiplied. Overall plans. Of development among several of these countries have been elaborated. Thus, according to the organ of the SED Neues Deutschland (February 2, 1951), Poland and Czechoslovakia are together building about twenty factories, one of them an electric plant at Dvory, synthetic textile plants, a leather combine, etc. A Polish-Hungarian committee is elaborating a five-year plan of economic cooperation, as well as coordination of the industrialization plans of the two countries.

According to the Soviet review Voprossi Ekonomiki (July 1951), the foreign trade of these countries is characterized by a clear tendency to replace bilateral trade agreements and clearings by multilateral agreements. An example of two agreements of this kind is given by the commercial treaty of the end of 1949 among the USSR, Poland and Finland, and among the USSR, Czechoslovakia and Finland. Finland will supply the USSR with frame houses, building timber, small vessels and other goods amounting to 100 million rubles; it will receive in exchange 80 million rubles of Polish coal, and. Czech sugar, machines and other products in the amount of 20 million rubles. Poland and Czechoslovakia will receive from the USSR 80 and 20 millions, respectively, of live stock fodder. This kind of triangular trade undoubtedly increases the control of the USSR over the trade of all the “peoples’ democracies.”

The USSR plays the role of depot and redistribution center not only for trade of the “peoples’ democracies” with capitalist countries but even for trade between the various “peoples’ democracies.” Nevertheless, this system permits a deeper integration of economy among the buffer zone countries and represents a stage toward a degree of common planning among all these countries. The same role is played by delivery plans and long-term credits which are taking an increasingly important place in reciprocal trade among the countries of eastern Europe.

There is no doubt – and the least benevolent among capitalist sources have had to admit it – that despite the pillaging role played by the Soviet bureaucracy in the economy of the buffer zone, eastern Europe has reached a degree of economic integration and of a drastic elimination of customs barriers that has no counterpart in the parallel pathetic attempts in western Europe. The superiority of the mode of production based on nationalization of the means of production is thus confirmed anew.

The Kremlin’s Special Privilege

This does not mean that there has been a decrease in the various forms of exploitation which the Soviet bureaucracy introduced into its relations with the “people’s democracies” The “Soviet corporations,” SAG in Germany, USIA in Austria, the joint corporations Sovrompetrol, Sovromgas, Sovrochim etc. in Rumania, Maszovel and Molai in Hungary, continue to play a disruptive role in the economy of the buffer zone and in the reciprocal relations among the “peoples’ democracies.”

Thus, according to the Neue Zürcher Zeitung of February 2, 1951, the USIA companies at the beginning of 1951 offered some thirty modern steam locomotives on the Vienna Market at the very time when the Soviet foreign minister was compelled to purchase 300 Swedish locomotives because of inadequate production in the USSR.

At the very time when the scarcity of oil is greater than ever in the Soviet bloc, the camouflaged Soviet trade corporation in Austria OROP is offering large quantities of Diesel oil, etc. These instances, resulting from the needs for liquid foreign exchange on the part of the Soviet companies in the buffer zone, demonstrate the anarchic character still remaining in the relations among the Soviet corporations, the economy of the country in which they are located, and Soviet economy. [6]

Trade With the West

Trade between the buffer zone countries and the capitalist countries of the West has decreased greatly, resulting from both the voluntary transfer of this trade to the USSR and to the “peoples’ democracies,” as a result of the need of freeing planning from the pressure of the capitalist world market, and from the imperialist blockade. For Bulgaria, Rumania, and to a degree even for Hungary, trade with the imperialist countries has become negligible. On the other hand; it continues to play an important role for Poland and Czechoslovakia. Although the relative weight of Fast-West trade has likewise decreased for these countries, the absolute level of this trade remains high.

According to the Bulletin économique pour l’Europe of the UN, Poland exported to the countries of western Furope in the amount of $305 million in 1951, as Against $230 million in 1950 and $172 million in 1938. Its imports from western Europe amounted to $195 million in 1951, as against 164 millions in 1950 and 136 millions in 1938. As for Czechoslovakia, while its exports to western Europe in 1951 were $171 million as against $204 million in 1950 and $198 million in 1938, its imports from western Europe rose in 951 to $187 million as against $171 million in 1950 and $135 million in 1938.

The principal suppliers to Poland have been Sweden (iron ore), Denmark, Great Britain (machines) and western Germany (machines); the main suppliers of Czechoslovakia were Belgium, Switzerland, Sweden and western Germany. In general the importance of trade with the “peoples’ democracies” has declined greatly in the foreign trade of all capitalist countries, with the exception of the Scandinavian countries and, to a degree, that of Italy and of Switzerland. This decline is particularly significant for Great Britain and Germany which formerly obtained their food supplies from these countries and sold them manufactured goods. It is not solely due to the blockade. The requirements of the east European countries are almost exclusively geared to industrial tooling and to certain raw materials (non-ferrous metals, rubber, cotton.) The blockade has made it difficult for the “peoples’ democracies” to obtain these products (The Economist of March 1, 1952 reports a speech of a Polish Stalinist leader complaining of the scarcity of non-ferrous metals caused by the blockade).

Despite the great efforts, both legal and unofficial. which commerce of the Soviet bloc must make to secure ball bearings, special steels, communications equipment, piping for oil installations, the changed economic structure of the “peoples’ democracies” is beginning to show itself in its own export trade. A formerly exclusively agricultural country like Hungary is now exporting Diesel automobiles and air-conditioned railroad cars to Turkey medical supplies and X-ray equipment to Egypt and radio transmitters as far as Belgium. It has even recently concluded a contract for the delivery of complete trains to Argentina, entering into competition with the United States, Great Britain, Germany and Belgium in this field. These are changes which will in the long run have profound effects on the overall structure of the world market.

5. Productivity and Workers’ Resistance

The introduction of a considerable quantity of new machines must necessarily bring about an increase in labor productivity. Inevitable difficulties can arise from the influx of hundreds of thousands of peasants into industry who are unaccustomed to working with machines in general and with costly machines in particular. However, it is not this difficulty which is considered of prime importance by the Stalinist leaders when they complain of the inadequate output of labor in the buffer zone countries. What they are after is an increase in the rate of output, the speeding up of the tempo of work, generalization of the assembly line, that is to say, they are demanding an additional physical effort from the workers.

To this increased physical effort there is added an increase in the work week, abolition of Saturday off for miners, decrease in premium pay for night work and overtime hours, female labor in the mining industry and in unhealthy industries. In the face of these measures, the resistance of the workers, particularly those of Poland, of Czechoslovakia, of eastern Germany and to a degree those of Hungary, educated by decades of fierce class struggle, is energetic and even sometimes effective.

The surest means of pressure that the Stalinist authorities have in influencing the attitude of the workers is the fixing of wages by the state. In most of the “peoples’ democracies,” the fiction of the “collective agreement” between the trade unions (under Stalinist leadership) and the state (under the same leadership) has been dropped. Where it was introduced, as in eastern Germany, it expressly provides that the government itself, if it considers it necessary, can itself change or set the production “norm” related to basic wages.

In Czechoslovakia (Neue Zürcher Zeitung, May 27, 1951) the “basic wage” for each factory was set in a stable fashion, which can no longer be exceeded except in the case where the objectives of the plan are surpassed. This means that should the work for realizing the plan require hours in excess of those provided they will not be paid for or they will result in a general lowering of wages. This measure was accompanied by a general rise in norms. In August 1951, a second revision took place (The Economist, September 8, 1951), resulting in a real reduction in average wages. Rabotnitchesko Delo central organ of the Bulgarian Stalinist party, complains in its issue of December 18, 1951, that the norms are too “rigid” in Bulgarian industry.

Progressive raising of norms and differentiation of wages are demanded in order to increase the output of the workers. In Rumania, since the beginning of 1951, measures were taken to raise the norms, to reduce the wages of unskilled workers and for payment of overtime. (The Economist, January 13, 1951)

Price Policy and Wages

Price policy represents the indirect pressure instrument in the hands of the government: without changing nominal wages, the increase in prices provokes a decline in real wages. This is what is taking place notably in Poland, Czechoslovakia and Hungary with the successive introduction, abolition, and reintroduction of the dual price sectors (rationed sector and free sector). In Hungary, for example, upon the final abolition of rationing, there resulted a price increase of close to 300% for bread, butter and beef, and of about 200% for lard, sugar, vegetable oil and milk. At the same time nominal wages increased only 28% (The Economist, February 9, 1952). This is the method used by the Stalinist leaders for taking away with the right hand what they give with the left in order to stimulate productivity: increases in nominal wages which are actually inflationary, as we saw previously.

This is how the bureaucracy suppresses what Eugene Varga has not hesitated to cynically label “consumer fever and wage fraud” (Szabad Nep, June 18, 1950), which consists in the fact, incomprehensible to this philosopher of the bureaucracy, that “everybody is seeking new clothes, new furniture, new homes and better food ... (whereas) it is in the interest of future consumption to consume less today.”

In order to teach recalcitrant workers how to “consume less” and still keep quiet, the Stalinist governments are progressively introducing the work legislation in force in the USSR. Whereas the workers; as a result of the shortage of labor, could on their own initiative leave their work place when they had the slightest reason for dissatisfaction, they are today attached to the plant, as in the Rumanian decree of November 21, which makes every change in industrial employment dependent on a decision by the State. A Polish law of December 15, 1951 imposes severe penalties for minor “infractions of work discipline”: an unexcused absence of 20 minutes (!) results in a reduction in wages; an unexcused absence of more than an hour brings a loss of a day’s pay; an unexcused absence of 3 days is punished by a month’s work at a 20% decrease in pay; an unexcused absence of 4 days by a 3 months’ work at a decrease of 10 to 25% in pay, etc.

But “relaxation of work discipline,” absenteeism, relaxation of physical effort, are the normal reactions of workers confronted with speed-up, physical. exhaustion [7] and an absence of goods to buy for their swollen nominal wages. All the Stalinist dignitaries protest and weep because “work discipline” is not so good. Rakosi stated at the beginning of this year (Szabad Nep, January 13, 1952):

“It is obvious even today as to what will take place if work discipline does not change. We are vainly giving the leaders of economy the means (!) for using legal methods for re-establishing work discipline. All this will serve no purpose so long as the comrades are afraid to use forceful measures.”

Several weeks previously Zapotocki stated (Rude Pravo, November 1, 1951) that the origins of the slowdown in economic development lay in the relaxation of work discipline. The report of the secretary of the Bulgarian trade unions states (Rabotnitchesko Delo, December 18, 1951) that it is customary in very many enterprises for a part of the workers to absent themselves without valid reasons.

Alongside this elementary form of passive resistance [8], more active forms of resistance are already manifesting themselves, linked with a certain stabilization of living conditions. Here we must cite primarily the workers’ resistance against the conclusion of new “collective contracts” in eastern Germany, which compelled the Stalinist functionaries in the large plants to really discuss these contracts before dozens of meetings; the open resistance of the miners in the Ostrava Basin in Czechoslovakia; the demonstration of 10,000 workers at Brno in Czechoslovakia in November 1951 to protest against suppression of the Christmas bonus.

6. Bureaucracy and the Rise in Production

Together with labor legislation, the industrial management forms which have been in force in the USSR for 20 years have now been introduced into the “peoples’ democracies.” Since May 1950, the principle of individual responsibility of company managers, and of their omnipotence on the plant level, has been applied in Poland. In Hungarian industry the same measure was introduced a year later (For a Lasting Peace, November 16, 1951). Rude Pravo published an article on September 26, 1951 in which the same principle is insisted on. The reorganization of industry which accompanies the fall of Slansky likewise tends to strengthen the principle of individual responsibility in managerial matters (Rude Pravo, September 9).

But at the same time that Stalinist organs are fulminating against bureaucratism; at the same time that they insult chairmen of workers’ committees who think “they ought to meddle in the work of managing companies and production, a work which should be incumbent on the manager alone ... (who) fancy themselves managers of the companies ... (who) do not know how to demand a maximum of work (from the workers).” (Rude Pravo, October 3, 1951) they find themselves under simultaneous pressures of inefficiency of the bureaucratic management and of the discontent of the workers.

The establishment last September of a minister of state control, under Bacilek in Czechoslovakia represents an interesting reaction on the part of Czech Stalinist leaders in the face of this double pressure. In order to combat bureaucratism, “all levers of command in the state administration for control shall be confided exclusively in workers” (Rude Pravo, September 19). But at the same time, in order to continue the struggle for increased productivity, the autocratic character of the plant manager will not be questioned. The task of the worker-controller will consist of “verifying the facts, and nothing but the facts. But not to middle in the conflicts and frictions inherent in the company.”

But the question is precisely one of this kind of meddling. For what the workers are seeking and will be seeking on an increasing scale are organs for “meddling” in the “conflicts and frictions” which set them against the bureaucrats in the plant. These organs are the Soviets. And the factory committees existing in most of the countries of the buffer zone are considered by the workers as embryos of these organs of defense of the workers and of strict control over the bureaucrats.

Whatever may have been the measures taken by the Stalinist leaders to emasculate these factory committees and to transform them into organs submissive to the bureaucracy, each time they have had to feel the pressure of the workers and have shown themselves as ineffective instruments for the government. It is up to the workers to find the means to transform them into effective defense instruments for their own interests.

Socialist Democracy

The Czech, Polish, Hungarian, and needless to say the east German working class possesses the necessary technical and organizational qualification to take into its own hand the management of national economy. That is the precondition for reviewing and revising the objectives of the plan which are introducing permanent factors of instability into economy; for correcting the relations between heavy industry and light industry in order to raise the living standards of the workers and peasants and thus create a material base for raising productivity.

Modifications of the plans for heavy industry must be directed towards priority production of agricultural machinery, for mechanization of agriculture represents the only way to abolish the disproportion between industry and agriculture.

Revision of norms must reflect the sentiments of the majority of the workers. All these measures will not weaken but will strengthen the capacity of the “new democracies” to resist imperialism, for they will for the first time base this resistance on the conscious, enthusiastic, limitless attachment of the masses to the new system of production.

The higher the worldwide anti-imperialist struggle rises; the greater the number of blows dealt to capitalism by the international proletariat, the more will the workers of the buffer zone regain confidence in their own strength and will take to this road along which socialist planning will be combined with socialist democracy.

Footnotes

1. See our articles in Fourth International (May 1949 and September 1949) on the preceding stages of the economic evolution of eastern Europe.

2. Furthermore it is pointed out that in Hungary the increase in the production of raw materials is considerably below the general tempo of the increase in industrial production (Szabad Nep, July 27, 1951). According to the Yugoslav paper, Borba, June 10, 1951, this may be a calculated design of the Soviet bureaucracy to increase the dependence of Hungarian economy on that of the USSR.

3. In Poland, an average of 90 people, 56 of them adults, live off a farm area of 100 hectares, and in Hungary more than 200 people on the average make their living from 300 yougs (171 hectares).

4. In his previously cited speech, Rakosi acknowledges that the huge exports of wheat in 1948, 1949 and 1950, had sharpened the crisis. The anti-economic way in which agrarian reform was carried out in Czechoslovakia and eastern Germany has had the same effects.

5. Tehervenkof, secretary-general of the Bulgarian Stalinist party, correctly explains in For a Lasting Peace (May 5, 1950) that involved here is a matter of absolute rent, since it concerns revenue arising from land property, independent of yield from the land. A. Petruschof writes to the contrary in the Moscow New Times of March 28, 1951, that this revenue “has nothing in common with absolute rent.” Without explaining why, of course ...

6. Together with reparations and mixed corporations, the Soviet bureaucracy has found a surprising new instrument of pillage: it has just demanded from Bulgaria payment of 10 million dollars as a charge against ... credits granted to the Bulgarian CP by the Communist International over a 28-year period!

7. The Hungarian review Tarsadalin Szemle (July-August 1951 issue) fcit it necessary to “prove” by ridiculous reasoning that Stakhanovism is not injurious to health. The pulse of shock workers does beat a little stronger at the beginning of the day, signs of exhaustion do appear, but all of that can be eliminated by “the positive emotional factor,” by “the desire and love” for production ...

8. According to Rude Pravo of February 14, 1952, the number of work places in the mining basin of Ostrava, where shock brigade work was introduced, has steadily decreased. It was 88 in May 1951, 54 in November and 44 in December 1951. According to the newspaper Nova Svoboda, of February 21, 1952, five of the 10 sections of the CP in this region could not hold their meetings in January because of inadequate attendance. In three sections, 17% of the members were present, and in the remaining two, 45 and 50%.